Slugfest over DeMon impact: Opposition harps on slowing economy

CHENNAI: Defence Minister Nirmala Sitharaman on Wednesday reiterated that demonetisation, launched by the Centre on November 8, 2016, had helped curb terrorist activities in strife-torn Jammu and Kashmir. She said the exercise had not aimed at ‘no-cash’ transaction but ‘less-cash’ transaction so that black money growth could be curbed.

Addressing a press conference at the State BJP headquarters here, the defence minister said, “stone-pelting incidents engineered by terrorists in Jammu and Kashmir had come down to a significant extent. Now, unable to cope with the situation after demonetisation, which had made cash transaction for terrorist activities impossible, they started attempting to loot banks there and the government was taking action to check this menace.”

Sitharaman said the cash-to-GDP ratio (the ratio between the gross domestic growth GDP and the extent of use of currency) was important for the economy of any country. “In developed countries, it would not exceed seven to eight per cent.  Ours being being a developing country, 86 per cent of transactions had been taking place through cash. If the cash-based economy is so big, the income to the government will be less because of the informal economy.”

Currency-based transactions would lead to several problems including tax evasion and black money. Hence, demonetisation was implemented to check the growth of black money, she said, adding that the attempt was made, not for ‘no-cash’ transactions, but for ‘less cash’ transactions.’

She took strong exception to Manmohan Singh’s description of demonetisation as an organised plunder and legalised loot. “When organised plunder was indeed happening during his tenure as prime minister, Manmohan Singh turned a Nelson’s eye to it.  The use of such expressions by him about demonetisation, which was aimed at strengthening the economy of the country was indeed deplorable, she added.
Earlier, the minister launched a signature campaign in support of demonetisation at Natesan Park in T Nagar.